[rollei_list] Re: OT - The Concorde
- From: Ardeshir Mehta <ardeshir@xxxxxxxxxxxx>
- To: rollei_list@xxxxxxxxxxxxx
- Date: Thu, 21 Apr 2005 15:37:57 -0400
On Thursday, April 21, 2005, at 01:44 PM, Roger M. Wiser wrote:
> How about the return on the investment on Concorde?
>
> Roger
That went right though the roof, admittedly.
All the same there's something fishy about the Concorde cancellation. I=20=
wrote a post about it on another mailing group as follows:
[QUOTE]
March 9, 2005
Since a long time we've been told that the supersonic airliner Concorde=20=
was "too expensive to operate". Some people even say that "each=20
passenger who has flown on the jet has, in effect, been subsidised by=20
about =A33,000 per trip."
Oh, really?
Let's do some simple calculations, shall we. The specifications of the=20=
Concorde are no secret: they are available on the Web for all to check=20=
out. It turns out that each Concorde used to fly a typical payload of=20
100 passengers across the Atlantic in about 3 hours on a single tankful=20=
of fuel, which in its case amounted to around 26,000 US gallons. Each=20
Concorde had a flight crew of 9 or 10. Each Concorde required - let's=20
be generous - maybe another 90 people on the ground to keep it flying.=20=
That makes a total of 100 people working full shifts to keep the 100=20
paying passengers in the air for three hours. Expensive, huh.
And the 20 Concordes which were eventually made were made at a cost, in=20=
2004 US dollars, which has variously been given as anything from $13=20
billion to $32 billion, making it by far the most expensive civilian=20
aircraft ever made. Let's take $20 billion as a nice round average=20
figure, then each Concorde cost about $1 billion per plane. The word=20
"expensive" is, in fact, much too mild. "Bloody effin' expensive" is=20
more like it.
But, and this is a big "but", that money was all paid by the British=20
and French taxpayers, not by British Airways or by Air France, who were=20=
given the planes for just =A31 each! However, let's factor the=20
manufacturing price into the equation, just to satisfy the critics,=20
okay?
Now the Concorde has had a very long run: since the October 1, 1969,=20
when the first one flew, all the way to the year 2004: which is to say,=20=
35 years or thereabouts. Given the high speed at which each of them=20
flew, each could easily have made two trips across the Atlantic in any=20=
given 24-hour period; but let's say, for the sake of being generous to=20=
the critics, that each made only one transatlantic flight in every 24=20
hours, and that in any given year each flew, on the average, only 300=20
days out of the 365. That still leaves each Concorde making over 10,000=20=
trips over its lifetime. (Note that most other airliners fly between 7=20=
and 12 hours in every 24 hour period, so the less-than-3-hours-per-day=20=
average we are assuming for the Concorde is VERY conservative!)
However, even at the low figure of less than 3 hours per day, the=20
enormous cost of each Concorde could be depreciated at the rate of less=20=
than $100,000 per trip, right? $1 billion in 2004 US dollars divided by=20=
10,000 is a mere $100,000, again in 2004 US dollars.
And suppose maintenance of these twenty planes on the ground over those=20=
35 years has cost, in total, just as much as the twenty planes=20
originally cost to make. No plane is THAT expensive to maintain, but=20
let's say the Concorde was. Even then, the maintenance cost per plane=20
per flight was still only $100,000, in 2004 US dollars!
And the fuel per trip would amount, at today's prices for jet fuel,=20
which hover at around $1.55 per gallon, to $40,300. Heck, let's round=20
it up to $2.00 per gallon: it would still amount to only $52,000, in=20
2004 dollars.
And let's say each person of the 100-person air-plus-ground-crew was=20
paid, in today's prices, US $500 a day (only the highest-paid airline=20
personnel are paid as much as US $500 a day, but let's be generous to=20
the critics and say that all of them were paid that much): that still=20
amounts to only $50,000 per flight, in 2004 US dollars!
And let's say each passenger used to consume food and drink worth $500=20=
on each flight. No one consumes food and drink worth $500 on a=20
three-hour flight: I certainly didn't, not the last time I flew, even=20
on those rare occasions when I flew first class: but what the heck,=20
let's say they ALL used to feast at Mach 2 on foie-gras and truffles=20
and caviar, and wash it all down with the best champagne: the food bill=20=
would still have been only $50,000 per flight, in 2004 dollars.
So what does it all add up to? Do the math: it's a mere $352,000 per=20
flight!
Depreciation: $100,000 per flight
Maintenance: $100,000 per flight
Fuel: $ 52,000 per flight
Personnel: $ 50,000 per flight
Food & Drinks: $ 50,000 per flight
TOTAL: $352,000 per flight
Round it up to $400,000, in 2004 US dollars, to account for insurance=20
and airport fees and other incidentals - heck, round it off generously=20=
to HALF A MILLION dollars, in case I've forgotten something - and it's=20=
still a pittance.
Because the price of a round trip ticket on the Concorde, when it was=20
last flying with Henry Kissinger and Mick Jagger and Elton John and=20
other celebs and businessmen and investment bankers on board, was as=20
much as $15,000 per person! (Not that they couldn't afford even twice=20
that much, the frequent flyers on the Concorde were pretty much all=20
gazillionaires.) That makes a total of $1.5 million in revenue for two=20=
trips, or $750,000 per trip. Enough to make a tidy QUARTER OF A MILLION=20=
dollars profit for the airline!
But hey! Why fly celebrities and investment bankers when the Concorde=20
can fly freight or documents even more profitably? The Concorde's=20
typical payload was about 25,000 pounds. Transatlantic overnight=20
freight nowadays, like via FedEx, flies on regular subsonic aircraft=20
for about $35 per half-pound-maximum-weight FedEx envelope, which is to=20=
say, $70 per lb. - and that's just able to "reach major business=20
centers in 24 to 48 hours" (check out the prices using the FedEx rate=20
finder on the Web at http://www.fedex.com/ratefinder/shipInfo). But=20
since the Concorde could offer SAME DAY service between New York and=20
London or Washington and Paris, it could charge even more, at least=20
$100 per pound. And at that price a courier airline could make $2.5=20
million per one-way trip for a fully laden Concorde =85 and since =
freight=20
doesn't gobble up any caviar nor guzzle down any champagne, nor does it=20=
require curvaceous flight attendants to serve these delicacies, the=20
cost per trip would go down to - what? maybe about $300,000, in 2004 US=20=
dollars, leaving an even huger profit!
Yes, yes, yes, I hear all you sceptics loudly clamouring that a big=20
chunk of that $100-per-pound would go towards transporting the=20
envelopes to and from the two airports, one on each side of the=20
Atlantic, but how much can that be? More than 50%? More than 70%? Yeah,=20=
raaaaaaaaight.
But even if that were true, it STILL leaves the Concorde making a=20
profit of almost half a million dollars per flight!
And note that all this is based upon calculations which give the=20
critics the benefit of the doubt. In actual fact the operating costs of=20=
the Concorde would NOT have included its depreciation (which was paid=20
for by the taxpayers), nor can it have cost THAT much to maintain the=20
Concorde over its 35-year flying life ($20 billion dollars!!!), nor can=20=
it have needed THAT may people to look after each Concorde on the=20
ground, nor can they have been paid THAT much, not can the passengers=20
have been eating and drinking THAT much food and drink per flight!
And neither, of course, can it cost FedEx $70 per pound to transport=20
their half-pound-max-weight envelopes to and from the airport, because=20=
if that were the case, how could FedEx make any money charging just $70=20=
per pound to ship their envelopes at sub-sonic speeds?
But of course no one is telling us the TRUE costs of operating the=20
Concorde. In fact, British Airways aren't even willing to show them to=20=
Richard Branson, owner of Virgin Atlantic, as indicated by documents=20
published on the UK government's own web site (see=20
http://www.dft.gov.uk/stellent/groups/dft_foi/documents/=20
divisionhomepage/035683.hcsp)! Branson wants to buy five of the=20
now-grounded Concordes for =A31 million each (see news story at=20
http://news.airwise.com/stories/2003/06/1056381143.html), claiming that=20=
he could surely make the planes profitable, but British Airways don't=20
want to sell even one of them. WHY? Why would they rather make NOTHING=20=
AT ALL than make at least $5 million?
Lemme ask you: Is this fishy or is this fishy. What the HELL is going=20
on?
I am not saying the Concorde was an environmentally sound plane, nor=20
that it was cheap to make and operate, compared with all other=20
airliners. But I AM saying that it makes no sense to say it was not=20
PROFITABLE. If anyone claims it was, why are they not publishing the=20
figures to prove their claims? Are we supposed to believe what they say=20=
simply because they say it? Come ON.
[END QUOTE]
Tell me now what YOU think.
Cheers.
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